November 11, 2009 11:05 ET

Association of Gaming Equipment Manufacturers Releases October 2009 Index

LAS VEGAS, NV--(Marketwire - November 11, 2009) - After seven months of consecutive gains, sparked by a rally in the broader financial markets earlier this year, the AGEM Index turned course and slid down by the end of October 2009. Falling 10.9 points or 9.3 percent, to a reported 105.88 value, October's decline was the sixth largest drop since the index inception in 2005. However, it is important to note that the five larger declines also occurred during the latest recession and that stock valuations outperformed during the rally. Pricing recently retreated to levels more in line with historical reported earnings and estimated future performance.

By the end of October, for each member of the index that posted a gain in their stock valuation, three declined. Selected positive contributors to the index during the month include: (1) Bally Technologies (BYI) adding 0.34 points to the index based on a 2.66-percent increase in its stock valuation; (2) Ainsworth Game Technology (AGI) contributing 0.08 points to the index driven by a 26.92-percent increase in its stock price; and (3) Transact Technologies adding 0.02 points to the index with a 6.98-percent improvement in its stock performance.

International Game Technology (IGT) reported a 16.95-percent decline in its stock performance, contributing a negative 5.23 points to the index and WMS Industries (WMS) posted -1.41 points to the index with a 10.28-percent decline in its stock valuation; together they composed more than 60-percent of this month's overall loss in the index. It is important to note that for the second time in two months, WMS issued additional shares of common stock sourced to conventional convertible notes. Additionally, the stock was impacted by its third quarter earnings released the last day of October in which its profit jumped but fell short of Wall Street estimates. International Game Technology closed the same day down 3.6 percent on similar speculation regarding its earnings report.

                    Exchange:    Stock Price        Percent Change   Index
                     Symbol      At Month End       Prior    Prior  Contri-
                   (Currency) Oct-09 Sep-09 Oct-08  Period   Year   bution

Ainsworth Game   ASX: AGI (AU$) 0.17   0.13   0.08   26.92   120.00   0.08
Aristocrat       ASX: ALL (AU$) 4.52   5.25   3.81  (13.90)   18.64  (1.36)
Astro Corp.      Taiwan: 3064  68.10  73.00  50.40   (6.71)   35.12  (0.06)
Bally             NYSE: BYI
 Technologies       (US$)      39.39  38.37  22.15    2.66    77.83   0.34
Elixir Gaming     AMEX: EGT
 Technologies       (US$)       0.28   0.28   0.12       -   133.33      -
GameTech         Nasdaq: GMTC
 International      (US$)       1.33   1.71   2.36  (22.22)  (43.64) (0.02)
Gaming Partners  Nasdaq: GPIC
 International      (US$)       4.51   5.80   6.89  (22.24)  (34.54) (0.05)
Global Cash    NYSE: GCA (US$)  6.33   7.31   2.82  (13.41)  124.47  (0.36)
IGT            NYSE: IGT (US$) 17.84  21.48  14.00  (16.95)   27.43  (5.23)
INTRALOT S.A.   ATHEX: INLOT    4.37   4.71   4.00   (7.22)    9.25  (0.37)
Konami         NYSE: KNM (US$) 18.54  20.33  17.80   (8.80)    4.16  (1.27)
Lottomatica    MILAN: LTO.MI
 (GTECH)            (EUR)      14.52  15.31  18.25   (5.16)  (20.42) (0.76)
Multimedia       Nasdaq: MGAM   4.91   5.12   3.02   (4.10)   62.58  (0.03)
 Games              (US$)
Shuffle Master   Nasdaq: SHFL   7.81   9.42   3.86  (17.09)  102.33  (0.42)
Transact         Nasdaq: TACT   5.67   5.30   7.00    6.98   (19.00)  0.02
 Technologies       (US$)
Wells-Gardner  AMEX: WGA (US$)  1.92   1.90   0.73    1.05   163.01   0.00
WMS Industries NYSE: WMS (US$) 39.98  44.56  25.00  (10.28)   59.92  (1.41)

Change in Index
 Value                                                              (10.90)

AGEM: September
 2009                                                               116.78

AGEM: October
 2009                                                               105.88


The AGEM Index 9% decline is directionally consistent with the broader markets' performance in October (S&P 500 lost 2%). Gaming's higher relative beta explains the index's typical outperformance/underperformance during market strength/weakness, respectively. The suppliers' decline in October is underscored by numerous events that collectively concerned investors regarding the timing of an eventual recovery in the sector. In particular Wynn Resorts, Las Vegas Sands, Boyd Gaming, and Harrah's reported 3Q results that were indicative of ongoing weakness in Las Vegas, without much evidence of stabilization/recovery. On the other hand, MGM MIRAGE numbers demonstrated stability in pricing/volumes, bolstered by market share gains.

While the market was absorbing this data, US Airways announced a capacity reduction to Las Vegas despite data during the month (and into November) that suggests volume declines are less bad in Vegas and better in some regional casino markets. WMS fiscal 1Q results were solid in the context of a domestic replacement trough, but management's financial guidance concerned investors who now place more risk on the back fiscal half of fiscal 2010. This impacted sentiment on the rest of the gaming suppliers during October despite results from Bally that were notable and saw an increase in financial guidance.

A number of other events round out October, most favorable-related to prospective gaming expansion as states look to address budgetary issues. These include additional slot licenses in California, tables advancing in Pennsylvania, Delaware considering more casinos, Minnesota considering a referendum for slots, Illinois' 10th license inching forward, Rhode Island getting atypical support from the Governor for more casinos, Florida approving electronic tables, Michigan looking to advance racinos, and Maine attempting to expand.

The AGEM Index

The Association of Gaming Equipment Manufacturers (AGEM) produces the monthly AGEM Index that comprises 17 global gaming suppliers throughout the world. A total of 12 suppliers are based in the United States and are listed on the NYSE, Nasdaq or AMEX, while two trade on the Australian exchange, one supplier trades on the Athens exchange, one trade on the Milan exchange, and another trades on the Taiwan OTC exchange. The index is computed based on the month-end stock price (adjusted for dividends and splits) of each company and weighted based on approximation of market capitalization. Market capitalizations for manufacturers trading on foreign exchanges have been converted to US dollar equivalents as of month-end for comparability purposes. The AGEM Index is based on a 100-point value as of January 2005.

About AGEM

AGEM is an international trade association representing manufacturers and suppliers of electronic gaming devices, systems, table games, key components and support products and services for the gaming industry. The Association works to further the interests of gaming equipment suppliers throughout the world. Through political action, tradeshow partnerships, information dissemination and good corporate citizenship, the members of AGEM work together to create benefits for every company within the organization. Together, AGEM has assisted regulatory commissions and participated in the legislative process to solve problems and create a positive business environment.

AGEM Membership Roster

The current AGEM membership roster, 81 strong, is a who's who of the supplier segment of the global gaming industry: AGEM Gold Members: Aristocrat Technologies, Aruze Gaming America, Austrian Gaming Industries, Bally Technologies, GTECH/Atronic/Spielo, International Game Technology (IGT), INTRALOT S.A., Konami Gaming and WMS Gaming. AGEM Silver Members: AC Coin & Slot, Action Gaming, Casino Technology, Interblock USA, JCM Global, MEI, Multimedia Games, Octavian International, Shuffle Master, Suzo-Happ Group, TCSJohnHuxley and Wells-Gardner Electronics. AGEM Bronze Members: Ainsworth Game Technology, Astro Corp., Cadillac Jack, Cammegh Limited, CashCode / Crane Payment Solutions, Diamond Game, Digital Display Group, Euro Games Technology (EGT), GameTech International, Gaming Support, Incredible Technologies, Jumbo Technology, KGM Gaming, MCA Processing, Modern Gaming, Rocket Gaming Systems and Summit Gaming. AGEM Associate Members: CMYK Creative, Cole Industries, Cybertec Gaming Systems, DynaGraphic Printing, Elite Casino Products, Esterline Advanced Input Systems, FutureLogic, Gaming Partners International, Gary Platt Manufacturing, Global Cash Access, Global Gaming Group (G3), Grand Products, Greenberg Traurig LLP, Howard & Howard, IdeaWork Studios, IDX, Intel, IPS, James Industries, Kreller Group, KSK, Lewis & Roca, Masterpiece Advertising, MC2, Mikohn Signs and Graphics, Money Controls, Nanoptix, Paokai Electronic Enterprise Co., Proforma GPS, Regulatory Management Counselors, Sanmina-SCI, Strategy9, Talent Associates, Tgraphics/Outpost Productions, The Bright Group, 3M Touch Systems, Tournament One, TMX, Trade Show Fabrications, TransAct Technologies, Veridocs, Wrex Products and Young Electric Sign Company (YESCO).

AGEM Index and Overview

The AGEM index and overview is prepared by Applied Analysis (AA). AA is a Nevada-based advisory services firm providing a wide range of consultation services for public and private entities. The company utilizes extensive experience in economics, information technology and finance to provide a wide range of services, including urban economic consulting, financial advisory services, market analysis, public policy analysis, hospitality industry and gaming consulting and information system and technology consulting.

Industry Analysis

Industry Analysis is prepared by Union Gaming Group (UGG). UGG is an independent research firm, government and industry advisor, focusing on the global gaming business. UGG provides research, access and advisory services and offers varying levels of research products and services, which capitalize on UGG's relationships with corporate managements, governments, and other parties relevant to the global gaming business.

Contact Information

  • Contact for AGEM release:
    Marcus Prater
    AGEM Executive Director
    (702) 812-6932
    Email Contact